Welfare cuts pushing child poverty towards record high by 2022, warns think tank

Posted On: 
20th February 2019

The number of children living in poverty is set to hit a record high by 2022 unless ministers drop their plans for further welfare cuts, a leading think tank has warned.

Child poverty could reach its highest level on record, the Resolution Foundation has found
PA Images

The independent Resolution Foundation said that by end of this Parliament the proportion of children living in relative poverty, after housing costs, is on course to hit 37%.

The figure, which has been rising since 2011, would overtake the previous peak of 34% in the early 1990s, the group’s report claims.

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The Living Standards Outlook 2019 also warns the majority of children in single parent families, or in families with more than two children, could be living in relative poverty by that time.

The Foundation, which is chaired by former Tory minister David Willetts, says action to prevent child poverty hitting a record high is achievable and “should be a priority for politicians of all parties”.

Labour branded the findings a "damning verdict" on the Government's records.

The report says that while weak productivity and earnings growth is likely to hold back the living standards of most households, “government policy is driving the particularly weak outlook for lower-income groups”.

And it cites benefits freeze, which is due to enter its final year in April but will reduce working age household incomes by £1.5bn, and the impact of the two-child limit on benefits as among the factors fuelling the sharp rise in relative child poverty.

The group also wanrs that the real disposable incomes of low-to-middle income working families in 2023-24 are set to be no higher than they were two decades earlier, in 2003-04.

Overall typical working-age household incomes are not forecast to rise materially over the next two years as pay growth is set to remain well short of its pre-crisis trend of 4% over the next five years, they say.

Senior Economic Analyst at the Resolution Foundation, Adam Corlett, said: “The UK’s current economic outlook is highly uncertain, and will hopefully surprise on the upside.

“But whatever direction the economy takes, the government must reassess the continuation of working-age welfare cuts.

“Otherwise, its non-Brexit record risks being stained by a return to record levels of child poverty.”

Shadow Work and Pensions Secretary, Margaret Greenwood, said of the findings: “This report is a damning verdict on almost nine years of Conservative austerity.

“Over four million children are growing up in poverty under this Government and that figure is set to rise to over five million in the next few years.”

Chief Executive of the independent Joseph Rowntree Foundation, Campbell Robb said: “It is within the Government’s power to stem the rising tide of child poverty before it reaches a record high.

“The benefits freeze is the single biggest policy pushing families into hardship. Low-income families cannot afford another year of their support falling further behind the prices they have to pay.”

A Government spokesman said in response to the report: “Our priority is to support people to improve their lives.

“Since 2010 we’ve introduced the National Living Wage, doubled free childcare for 3 and 4 year olds, and cut taxes for 32 million people to help families meet the everyday cost of living and keep more of what they earn.

“Yesterday’s figures show the unemployment rate is the joint lowest since 1975 and wages are growing at the fastest rate in over a decade, outpacing inflation for nearly a year.